The sun. [volume] (New York [N.Y.]) 1833-1916, 1887-11-13
READINGS FINE FUTURE.
ENGLISH CAPITALIsTs RECEIVE A
GLOWING REPORT

ENGLISH CAPITALISTS RECEIVE A
GLOWING REPORT.
over po,aoo,ooo Avas,asis for Divide.a.-
wise Economics Adopted ~ the Now
ACKNOWLEDGEMENTS Prospects Ahead.
c,ayngh, 1887, ey rns sus Prin,ino ara Fubit,Airs
Lfsociafton
LONDON, Nov. 12.-Several months ago q
number Of London capitalists, headed by Mr..
John I. North, engaged Mr.. Edward Bates
Dorsey. an American engineer, to examine
and report on the physical and financial con-
dition Of the Reading Railroad. Mr.. Dorsey
has Just made his report which follows. and
which accounts for the heavy purchases on the
New York market for English account
"vICToR1A HOTEL. London. Nov. II.
JOHN T. NORTH. ESQ, GRACE CHURCH
STREET. London.
Dear Sir: In compliance with your instruc-
lions have made thorough examination OF
the Philadelphia and Reading railway and It's
properties. and beg TO report to you rs follows:
This company operates about 1.1G0 miles OF
railroad running from Philadelphia into and
through the southern and middle anthracite
coal districts Of Pennsylvania, including two
thirds OF tho Bound Brook railroad between
Philadelphia and New York. 1t also owns all
the shares Of the Philadelphia and Heading
Road and Iron Company. representing freehold
and lessehold interests in valuable and extern
sive coal mines. thereby controlling about one
third OF all tho available anthracite coal In
the United States east OF the Rocky Noun
tains, under the general name OF Read
ing. include both companies. have
many times during the past six months
had occasion to examine the property. and
have invariably found 1t in good condition. and
much better and moro economically managed
than under the former regime Tho basis OF
tho estimates and comparisons which mako
arc from the official report Of the company for
the year ending Nov. 80. 1886. which report
shows q loss after deducting rentals and in
terest for the year. Of $4,762.969. Iestimate the
net profits for the year ending Nov. 80. 1887, as
follows:
Inoreass Of earnings 1885, exclusive Of In.
forest and rentals based upon actual for
months partial rsturnA For October and estimated
turns for November O. add saving Of interest
and rentals under reorganization a. perfected.
N.60oooo Total increase Of net earnings 1888.
se2soooo lees loss in 1888 SAFE ESQ., net proht avail
shs for dividends S<s7oe1 about nine per cent
the entire share capital
This road under It's present good manage
ment will soon resume its former position as
good dividend payer. a. it was previous to the
year 1915, when the usual annual dividend was
10 Der cent on all the share capital Close ex-
animation shows that these savings in operat-
Ing expenses have not been made at the ex-
pense Of the efficiency Of the road. except Dor
haps In some Of the rolling stock. Tho roadbed
and superstruoture Of all the main lines
arc In good condition for any kind
Of traflo. The side lines and feeders
arc In GOOD condition for freight trafflc.
Tho rolling stock Ia somewhat detoriorated.
and 1t viii be necessary. perhaps. to increase
the present repairing force. AS an Offset to
such An increased outlay however. operating
expenses can and ought to be still moro re-
duced which would moro than balance the in
creased outlay for repairs.
As An evidence Of the good condition Of the
road and rolling stock. the trains are running
more regularly, hauling larger loads and NOV
ing more freight than ever before.
The present management has been In
power about ten months and has made very
great economies in operating expenses with
out impairing In the least the efficiency Of the
Rad. and when tho company Is fully reorgan-
izsd on the plan that 10 now being followed
az snd Tne prescns
has q dssd
peissss while the former msnaeement. Tor
want OF money, was compelled to borrow at
tsaa. ia s q Snons
for Qash or negotiable paper.
os e s assra g. es ssS
sS E s than about a s ssn
per cent Per annum for the last twenty years.
A. s sh &c 90 hs s
crease proportionately. which will in tho future
ally. These net earnings fol, 1888? viii be, over
sasnSss tie 9H BE-
900 annually. the interest and rentals remain
ing about the Same.
Inroply to your inquiry az to the value Of the
the acts. and let You draw your own eoneiu:
sion. The par value OF the shares Is $50. and
tho present market value in New York Is about
Sa20. Ton dollars have been paid In nssess,
be returned to the shareholders In q Ave per
cent. income bond. I am informed BY reliable
authorities that thess bonds will be worth par
say Sg ninety Der cent. which would make the
preaenf price Of shares as follows.
Present market price Of shares In New York
say t925Q less income bond $40. or rather
are now earning 8 per cent on the par value
OF the shares this sum represents some 10 per
cent, upon tho present market price. There is
10 my SRnioS no IsasDa why fhis Snona not
net earnings that can certainly be expected
from the increase In trafflc. should be more
than ample to provide sinking fund, repair
dssd Work i reauirod in II tho mines. With ths
preceding facts you can form, your own conclu-
:Eton e 70 the present and future value Of the
Yours most truly Dw.np BATES Dorsey.
Member American Society Civil Engineers.
COTTON BROKER BAUM'S FAILURE
HE Creditors Want to Know ssnsthIns